The Study Of Trend And Fluidity Of Financial Market Based On Fractal And Wavelet Method

The goal of investment is looking for high yield rate. There are two method of investment, one is from fundamentals which means analyzing financial industry and operation side of listed company, the another one is from technical terms which means finding the future trend and time spot of dealing based on historical data. Based on the idea above, we use fractal and wavelet method to analyze the trend and fluidity in the China financial market.Firstly, we introduce Efficient Market Hypothesis and Fractal Market Hypothesis in detail, and compare the difference between them. The main idea of EMH is that market information is flowed adequately and evenly, the market players could make the reasonable and true decision quickly according to the information. The FMH believes that the share price has long memory, the market players will not make the decision in a short while after catching the information, they usually take action after considering the other players'action and the trend of the share price. Proved by facts FMH is more realistic valuable than EMH. We use R/S analysis derivative from fractal method to analyze the trend of China stock market based on historical Shanghai composite index close price. The result suggests that Chinese stock market has more trend characters in last several years than before.The fluidity of financial market is a hot spot nowadays. We use wavelet decomposition method to analyze the fluidity of China stock market. We find that the fluidity of China stock market is much more waved since 2007.